Public Policy and the Lottery

The lottery is one of the oldest and most common forms of random public distributions of property, as well as an important source of state and national revenue. Yet despite this popularity, lotteries have been a notoriously difficult area for government officials to manage. The reason for this is that lottery officials have no overall policy-making authority and are often subject to intense pressures from private interests. This is a classic example of public policy being made piecemeal and incrementally, with the result that few states have a coherent gambling policy.

In order to function, a lottery must have some means of recording the identity and amounts staked by bettors and then determining who will win the prizes. This may involve buying a ticket that is recorded and kept by the lottery organization for shuffling and selection in a drawing, or, as in some cultures, writing one’s name on a slip of paper that is entered into a pool of numbers. A percentage of the pool is usually reserved for costs and profits for the promoter, while the remainder is awarded as prizes.

Historically, the primary argument used in support of lotteries has been that they provide “painless” revenue by allowing citizens to spend their money voluntarily for the benefit of a particular public good, such as education. This argument is particularly effective when a state government faces economic stress, such as when legislators must choose between raising taxes or cutting public expenditures. But research shows that the objective fiscal condition of a state does not have much effect on whether or when it adopts a lottery.